How entrepreneurial SMEs compete through digital platforms: The roles of digital platform capability, network capability and ambidexterity

Javier Cenamor,Vinit Parida,Joakim Wincent

doi:10.1016/j.jbusres.2019.03.035

Abstract

Digitalization offers unprecedented opportunities for entrepreneurial small and medium-sized enterprises (SMEs). However, many entrepreneurial SMEs lack resources and capabilities or suffer from inertia, which hampers these opportunities. This study investigates how entrepreneurial SMEs can enhance performance through digital platforms. Specifically, the study examines the effect of digital platform capability and network capability on entrepreneurial SMEs' financial performance. The study also examines how exploitation and exploration orientations moderate this relationship. Based on analysis of 230 entrepreneurial SMEs, the results indicate that digital platform capability has a positive indirect effect on entrepreneurial SMEs' performance via network capability. The study also shows that exploitation and exploration orientations negatively and positively moderate this effect, respectively. The results suggest that entrepreneurial SMEs can enhance their performance through digital platform capability by aligning this capability with their orientation. These findings thereby enrich the literature on entrepreneurial SMEs and capabilities.

Highlights

Entrepreneurial small and medium-sized enterprises (SMEs) struggle to compete in highly dynamic environments (Chan, Teoh, Yeow, & Pan, 2018)
Drawing on the platform literature (Gawer, 2014; Jacobides, Cennamo, & Gawer, 2018; McIntyre & Srinivasan, 2017; Thomas, Autio, & Gann, 2014) and research on dynamic capabilities (Mikalef & Pateli, 2017; Teece, 2018; Teece, Pisano, & Shuen, 1997), this study examines the indirect effect of SMEs' digital platform capability on SMEs' performance via network capability
We used four items to measure first-order constructs for Exploitation orientation (e.g., “Leveraging of our current supply chain technologies is important to our firm's strategy”) and Exploration orientation (e.g., “To improve our supply chain, we continually explore for new opportunities”)

Summary

Introduction

Entrepreneurial small and medium-sized enterprises (SMEs) struggle to compete in highly dynamic environments (Chan, Teoh, Yeow, & Pan, 2018). In response to competitive pressure, many entrepreneurial SMEs use digital platforms to leverage their business strategy (Li, Liu, Belitski, Ghobadian, & O'Regan, 2016). Digital platforms are thereby transforming the way firms build a competitive advantage (Parker, Van Alstyne, & Choudary, 2016). Digital platforms play a central role in many firms' value propositions by enabling them to leverage information management (Cenamor, Rönnberg Sjödin, & Parida, 2017). Big data, artificial intelligence, and machine learning have become priorities for many firms that compete in digital platform ecosystems (Subramaniam, Iyer, & Venkatraman, 2018). Digital platforms represent an emerging field that is challenging the fundamentals of firm performance (Kazan, Tan, Lim, Sørensen, & Damsgaard, 2018)

Objectives

Methods

Results

Conclusion